European Stars and Stripes (Newspaper) - June 27, 1990, Darmstadt, Hesse                                Wednesday june 27, 1990 the stars and stripes a a a Page 3 the soviet Union running in the re soviet economist urges Quick Market Reform Kansas City to. Up a president Mikhail s. Gorbachev a chief economist said monday that the soviet Economy is a in a very dangerous situation As it is moves toward a Market orientation. Abel Aba Begyan said the transition to a Market based Economy in the soviet Union must come quickly to ease social tension and avoid the possibility of extended strikes and other actions that could destroy the country a Economy. Aba Begyan Rector of the Academy of National Economy under the soviet Council of ministers said at a news conference that soviet officials fear the Economy could experience problems similar to Poland a if the movement toward a Market Economy fails. Aba Begyan a longtime advocate of reduced Powers for Central planners in Moscow is considered the originator of perestroika and has been called Gorbachev a guru of economic Reform. A my own View is that the key problem is improving the finance and Money situation a he said adding that the soviet government must encourage savings at Banks and then extend Loans for housing and other needs. He said the inflation rate placed by the government at 7.5 percent actually is about 10 percent while the interest rate at savings Banks is Only 2 percent to 3 percent. Another crucial need he said is to a organize a Stock Market sell securities and organize  a we first need More Independence for our enterprises a he added. To attract participants the proposed soviet Market system needs to be structured around not Only goods but also a Money investment securities labor Force currency and so on a Aba Begyan said. The most important role the United states can play in soviet economic Reform is granting the country most favored nation trading status a move that he said would Foster a economic relations Between the two countries. Decreased soviet military spending resulting from an improved political relationship with the United states also is beneficial for the soviet Economy he said. Aba Begyan said that after a transition to a Market Economy is achieved a a process that could take two to three years a the soviet government must tackle other difficult problems including inflation unemployment and the disparity Between Rich and poor citizens. The collapsing soviet Economy president Mikhail Gorbachev is turning to free Market concepts in an Effort to save the failing soviet Economy. Word of Price hikes has spurred panic buying leaving store shelves empty. Prices on some goods already have increased eight fold. A look at what Central planning has done to the soviet Economy serious drop in Gross National product . Estimates of soviet Gnu Are More realistic than official soviet numbers. Annual growth in percent disposable income up very Little to buy savings Are up but mood is sour because there Are almost no consumer goods to buy. Typically soviets keep 25% of disposable income at Home instead of in the Bank. Savings in billions of rubles 60 40 a 20 _ kept in Banks kept As Cash 1979 1989 1979 1989 fewer goods being transported budget deficit up in billions of rubles National debt is up in billions of rubles 500 400 300 a 200 100 m 0 �?T89 i1 inflation skyrocketing percentage Range note most 1989 figures Are estimates. Source plan econ inc., Cia research by Lily Dow 6/11/90 Krten Inlo graphics Bill bake Cheney against major economic Aid to Moscow by the new York times Washington a defense Secretary Dick Cheney said on monday that it would be a mistake for Western nations to provide major economic assistance to Moscow because such Aid would subsidize the soviet military. The West German government announced on Friday that it would extend about $3 billion in Bank credits to help bolster the Kremlin a faltering economic reforms. President Francois Mitterrand of France also suggested last week that Western Aid would help Moscow Deal with desperate economic problems. Although Cheney did not specifically criticize any nation he assailed the idea of using economic Aid to prop up soviet reforms. His comments were generally consistent with current administration policy but More pointed than remarks made by president Bush. Bush indicated last week that the a United states is not planning a major Aid package but he did not invoke the Specter of the soviet military. Cheney a comments add to a growing debate in the West Over Aid to the soviet Union. A senior administration official said the Issue would be taken up at the Moscow is still spending a enormous amounts of its National wealth on military  a Dick Cheney nato Summit meeting next week in London. Meeting with reporters Cheney argued that Moscow is still spending a enormous amounts of its National wealth on military hardware despite a decline last year in its Overall military spending. It is an argument that the defense Secretary has made repeatedly in seeking to head off congressional moves for Sharp reductions in american military spending. A if you get the West in the business of providing economic assistance while they Are still engaged in this massive military expenditure to some extent you Are subsidizing that a Cheney said. A i do not think that is very Good  in their annual report to the joint economic committee of Congress the Cia and the defense intelligence Agency estimated that Moscow Cut military spending by 4 to 5 percent last year the first such reduction since Mikhail s. Gorbachev became the soviet Leader. Gorbachev has said that Moscow plans to reduce military spending by 14.2 percent by january 1991. The soviet leaders personal adviser on military matters marshal Sergei f. Fakhr Omeyer recently told a Bush administration official that Moscow would achieve the cuts by january and might even make greater reductions Over that period. But even after such cuts soviet military spending will remain substantial. Cheney argued on monday that providing economic assistance to the soviet Union would ease pressure on the Kremlin to scale Back the military. Such Aid might also enable Moscow to delay painful economic reforms he said by temporarily improving the lot of soviet Consumers. A the economic problems have been one of the prime pressures for Reform in the soviet Union a Cheney said. If the soviet Union fails to adopt a program of fundamental economic change he warned a you might merely end up with a situation where the assistance impeded  Bush also said last week that Moscow must undertake additional reforms before Washington could consider aiding the soviet Economy. He challenged the idea of providing economic Aid while the soviet Union funnels $5 billion a year to Cuba. A discount the fact that we Are planning some bold new initiative a Bush said. A on the other hand in a perfectly prepared to talk to our allies on any subject and i think that will probably be one of  Chancellor Helmut Kohl of West Germany said last week that he and Mitterrand believe that the soviet Union a needs help to help  some economists View West Germany a decision to extend Bank credit As part of an Effort to secure soviet concessions on German unification